Expert on gold and gold prices, Richard Russell, says that both the US and Europe are broke and it will all end by the central banks dishing out junk fiat inflation adjusted money while the millionaires and billionaires buy up gold and other precious metals and wait to reap the benefits.

With gold remaining in a trading range below the $1,700 level, the Godfather of newsletter writers, Richard Russell, had this to say about what is happening with regards to gold, silver, stocks, inflation and the Fed: “Technically, both the US and Europe are dead broke, and their GDPs would have to run wild on the upside to make the debt to GDP ratio more acceptable. How will it all end? It will end with the central banks churning out junk fiat inflation-adjusted money in order to service the debts. Meanwhile, the precious metals and other tangibles are being bought up by millionaires and billionaires as they await their turns to feast on the remnants.”

Richard Russell continues:

“The fact is that the Fed is happy with 2% inflation each and every year. Compound 2% inflation year after year, and you know what's happening? -- you've effectively wiped out the middle class. Between inflation, stagnant wages, higher taxes, and no jobs, the middle class has hit the brick wall like a fresh egg hitting the trunk of a redwood tree.

Why are you fearful, oh ye of little faith?” asked Jesus. And the answer is that I've been fearful all my life. It's probably a result or a reaction from growing up during the Great Depression and having my wits scared out of me during my stint in World War II. Today's young ones are fearful because they can't find jobs. Stop worrying, guys and gals, believe me it could be worse.

At present, I have no particular or specific thoughts about what the market may be telling us. But my faithful PTI remains bullish, and as I've said maybe a thousand times before, ‘My PTI is smarter than I am.’

I feel nervous when I can make an argument for the market -- either way -- bullish or bearish. I stated on yesterday's site that I've had my fill of this market. Let the Dow go to a new high over 14,000, and I'll just heave a sigh of relief.

From a Dow Theory standpoint, neither the Industrials nor the lagging Transports have bettered their recent March highs. I'd feel a lot more confident if they would leap over their March highs.

During the Depression wealthy individuals husbanded their dollars, and later got rich buying the battered remains of the Jazz Age of the twenties. It may not be that easy and cut and dried this time around. This time history may not rhyme.

As for gold, it continues to creep up toward the 1700s. Come to think of it, this is a creepy market. Nothing's moving fast -- just endless creeping.

The world markets are under long-time pressure from deleveraging, correction, and contraction. This is because a corrective bear market was halted temporarily by the frightened Fed, which fed trillions of dollars into the system. Against this, stocks have pushed up as they responded temporarily to the actions of the Fed, which gives us the confused picture that we are now dealing with.

The feature of the day (Friday) was gold, with April gold closing up almost $20. And little mister silver up almost a dollar. Are they thinking about inflation somewhere ahead? I think so. Remember, the precious metals may rise well before obvious signs of inflation. They call it discounting.”